Investing in one of the most promising real estate markets in Europe offers enormous opportunities. And as with every real estate market, in Germany too, the local framework conditions must be understood and their particularities must be adequately taken into account. The authors are renowned senior executives, real estate advisors and academics, who share here their extensive experience and real life insights from countless real estate investments, covering all aspects of a successful investment process in Germany. Includes: markets, the regulatory framework and investment guidelines. Contents: - Essentials for successful real estate investments in Germany - Macro-economic structure and dynamics of the German real estate market - Real estate investment, trends and strategies - Diverse submarkets: residential, offices, retail, hotel and nursing homes - Real estate legal, tax and audit frameworks - German REITS and ESG in real estate investments - Real estate M&A, financing, due diligence and valuations
The real estate market in Germany has recovered remarkably well from 2008/09 crisis. Portfolio transactions, infrastructure projects as well as investments in commercial and residential real estate are on the rise. This publication provides investors, property developers and advisers with a practical guideline to the legal, tax and commercial framework for real estate investments in Germany.
In this book, experts discuss how German real estate values have remained stable throughout the financial crisis, even though transaction volumes have been very volatile since 2005. Consequently, risk-averse national and international investors have started to invest in virtually all German real estate asset classes. This book tries to answer what has made the German real estate markets more resilient to shocks than many European real estate markets by analyzing the economic, regulatory and demographic environment. In 30 well-structured chapters, experts from both the academic and professional world analyze structural and current issues of German real estate markets. Readers will get a deep understanding of what makes the German real estate market special and where potential opportunities and threats in Europe’s largest real estate market exist.
The German real estate market is in motion. Single real estates as well as parts of real estate portfolios are still projected and brought to the market to a great extent. In addition, the ownerships of big real estate portfolios are changing. In the light of this situation, this book guides foreign investors and project developers through the legal, tax and economical requirements for real estate investments in Germany in a practical manner.
The aim of this study is to better understand stable capital growth of German properties and to contribute to the explanation of stable fund returns. In the course of the investigation, evidence is found that both phenomena are interrelated. All analyses are based on publicly available data; therefore they are not limited by client interests. Results show three different pieces of evidence on return smoothing, namely the influence on valuation, the timing of valuations, and the influence on returns resulting in return differences by calendar months. Together with the notion of internationally uniquely stable returns, it seems impossible to extract true asset volatility from the observed appraisal-based time series.
Master's Thesis from the year 2008 in the subject Business economics - Business Management, Corporate Governance, grade: 1, Royal Insitute of Technology (KTH) Stockholm (Division of Buildings and Real Estate Economics), language: English, abstract: This Master Thesis has the aim to identify the investment patterns of German commercial real estate funds in Sweden. Questions of “when”, “how” and “why” they entered the Swedish market are answered. Also the local distribution of these investments is taken into consideration. The motives why they had and still have chosen the Swedish market are explained and compared with several former research papers about foreign investment motives. 19 interviews have been made with German real estate funds as well as Swedish advisor companies in order to answer these questions. The interviews with German funds have shown that they face several problems due to the German Investment Act. The main difficulties are the prohibition of the double layer structure, hierarchy problems and strict regulations concerning investment rules. Thus German funds were limited in their ability to make decisions. But the German Investment Act will change and liberalize the German funds. Thus real estate funds will have the possibility to compete with other investors for projects, which they could not do before. German funds entered the market, because it promised to be a growing and stable market. At the time when German funds entered Sweden, the real estate situation and economic position was better compared with the German business and real estate cycles. The funds were mainly driven by diversification and the high liquidity in Germany. Official statistics showed that diversified international portfolios performed better than national ones. Another point in the investigation is the development of the interest rate in Sweden. Forecasts predict an increasing interest rate and so highly leveraged investors are likely to leave the market. German funds instead can be 100% equity financed and so will win more market share in the next years.
Diploma Thesis from the year 2005 in the subject Business economics - Investment and Finance, grade: 1,3, Otto Beisheim School of Management Vallendar (WHU - Dresdner Bank Chair of Finance), language: English, abstract: A Real Estate Investment Trust (REIT) is a property stock that is taxed, not at the corporate but at the investor level, which can lead to tax advantages. The concept of REITs originated in the United States in 1960, allowing smaller investors access to large income-producing real estate, which facilitated the creation of a liquid asset class that has become a core part of institutional portfolio management. REITs have proven attractive to investors because: x Their returns have beaten most major equity benchmarks over three decades, with lower volatility x They have predictable cash flows and high dividend yields x They have a low correlation with other asset classes, aiding portfolio diversification As US-REITs proved successful, other countries have introduced similar property investment vehicles. The Netherlands started in 1969, followed by Australia (1985), Canada (1994), Belgium (1995), Japan (2000) Singapore (2002), Hong Kong (2003) and most recently France (2003). In Germany real estate has been the most popular investment theme of the past three years, despite its significant underperformance compared to European peers during the past 10 years, with open-end funds receiving almost all money inflows. The listed sector, however, is insignificant, both in terms of size and liquidity, and is in desperate need of a catalyst. The introduction of a G-REIT structure could potentially be the long-awaited saviour that could transfer the importance of German real estate into the listed sector. Given the significance of real estate in their respective markets, the German and UK governments are currently considering the introduction of REITs. Depending on the progress of the consultative and parliamentary process, REITs are expected to be enacted by legislation during 2006 in both countries. The REIT discussion in Germany has reached a serious stage, with all the mostinvolved parties seemingly agreed about the usefulness of a REIT structure. The purpose of this paper is to highlight the case for REITs in Germany, to analyse the progress of REITs in countries that have installed these structures, to consider the on-going debate in Germany and what these developments may eventually mean for the German real estate market.
Open-end real estate funds are of particular importance in the German bank- dominated financial system. However, recently the German open-end fund industry came under severe distress which triggered a broad discussion of required regulatory interventions. This paper gives a detailed description of the institutional structure of these funds and of the events that led to the crisis. Furthermore, it applies recent banking theory to openend real estate funds in order to understand why the open-end fund structure was so prevalent in Germany. Based on these theoretical insights we evaluate the various policy recommendations that have been raised.
Since 2008, the German open-ended real estate fund (GOEREF) industry has experienced a critical phase of suspensions of redemption of fund shares, announced fund terminations and, eventually, introduction of a new regulation. With assets under management of over EUR 80 billion, GOEREFs are the dominant indirect real estate investment vehicle in Germany. Thus, it is extremely important to study the effects of this crisis on the risk and return characteristics of the respective funds. Both net asset values (NAVs) and potential secondary market prices of the shares of funds with suspended redemptions are used. The resulting total return patterns are analysed on an index basis for fund groups that best represent the most important investor groups for GOEREFs. Groups that comprised a higher number of funds with suspended redemptions were considerably worse off and less attractive in an asset allocation context than the others given the often much lower secondary market prices. However, changes in return and risk must also be considered in terms of NAVs. The fund group comprising co-operative savings banks' funds was virtually unaffected by the liquidity crisis and continued to be deliver stable and non-volatile returns, while the other fund groups exhibited a clear shift in their respective return profiles.
